HENDERSON, Nev., Jan 14 -- Consolidation Services, Inc. (OTC Bulletin Board: CNSV), engaged in acquiring land for organic farming operations and developing potential energy reserves on some of its acquired properties announces the signing of an agreement to acquire approximately one thousand acres of land in Eastern Kentucky for $1million. The agreement provides for the Company to simultaneously enter into a coal development agreement with an experienced energy and timber development group.
The Company will pay the development group $500,000 and fifty percent of the coal royalty revenues to permit, prepare all reclamation plans, contract for coal mining and oversee the actual mining and reclamation process. The property has an estimated 19 million tons of coal reserves; of which, on a conservative basis an estimated three to four million tons are classified as mineable reserves. The development group anticipates mining activities and receipt of royalties to commence in 2008.
Royalty rates are typically ten percent or approximately five dollars per ton based on current prices for this quality of coal. Total royalty revenues from the mineable coal are estimated to be $15-20 million based upon the information obtained from the energy development group, but not independently verified. Fifty (50%) percent of royalty revenues, if any, are to be retained by the Company. The reclamation process, following mining of the coal, is expected to enhance and benefit the Company's planned organic farming operations through the development of an estimated $1million in infrastructure on the property.
The coal mining reclamation efforts will develop pastures of specific sizes, good roads to pastures and to approximately forty natural gas/oil well drilling sites, establish ponds and watering sites throughout the property, reshape steep relatively inaccessible slopes to gentle slopes by lowering peaks and filling the hollows and seeding the pastures with Company selected species and varieties to maximize organic production.
'The acquisition of this sizable tract of land enables CSI to continue to meet its strategic objectives to acquire property for future organic farming operations, as well as generate cash flow from the energy resources believed to be situated on the subject property for the long term benefit of our shareholders,' said Dr. Johnny R. Thomas, President/CEO of CSI. The Company is escrowing $100,000 prior to closing, which is expected to occur within 120 days, subject to title searches and other customary closing procedures.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this press release are forward-looking statements. These statements relate to future events or to the Company's future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond the Company's control which could, and likely will, materially affect actual results, levels of activity, performance or achievements.
Any forward-looking statement reflects the Company's current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to operations, results of operations, growth strategy and liquidity. Such risks, uncertainties and other factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
SOURCE Consolidation Services, Inc.
